Small Business Owners Might Get More Help From Washington

January 13, 2015

New year, new Congress and new help for small business owners from Washington? Fox News says recent gridlock in the nation's capital "has stalled tax bills and other legislation aimed at helping small companies, but such proposals are expected to be on the agenda in the Republican-led Congress."

Fox reports parts of the Affordable Care Act are likely to be debated, and both lawmakers and the Small Business Administration want to make it easier for companies to borrow.

"Small businesses are looking for government to function and get a lot more done," says John Arensmeyer, CEO of the advocacy group Small Business Majority, a national nonprofit organization it says is "focused on solving the biggest problems facing America's 28 million small businesses."

However, these business-friendly bills are far from a sure thing as Senate Democrats have enough votes to filibuster and block Republican-led legislation, and President Barack Obama still has his veto power.

Tax Relief

President Obama Obama and Republican lawmakers both reportedly support a reduction in the corporate tax rate from the current 35%. But Fox says that might not be as big a benefit as you might think, given that many company owners are sole proprietors, partners or shareholders in companies who report business income on personal returns.

Fox says it's not known exactly how many people fall into those categories, because the IRS doesn't keep statistics on the number of 1040 personal returns filed by business owners. But their numbers are large enough that small business advocates want a cut in personal tax rates as well.

Todd McCracken, head of the advocacy group National Small Business Association, says a corporate rate reduction might be accompanied by the elimination of some business deductions, leaving many one-person companies and partnerships even at a further disadvantage.

Fox says the GOP is expected to try to make permanent an upfront deduction for the cost of equipment like computers and machinery. That means a quicker tax break for small businesses than if they depreciate equipment over the course of three to 20 years. The deduction has fluctuated annually, and an increase in the 2014 deduction to $500,000 from $25,000 wasn't approved until Dec. 16.

Another break that might become permanent is bonus depreciation, which accelerates the amount any business can deduct for property including buildings and equipment.

Business Borrowing

Fox says Congress is also expected to consider legislation to make it easier for small businesses to borrow. Democrats expect to reintroduce a bill to help women-owned businesses get loans backed by the SBA.

And a streamlined, paperless lending process is expected to encourage more banks, particularly smaller ones, to make SBA-backed loans.